IRS paid $6B in bogus child tax credits

Associated Press

WASHINGTON

The IRS paid at least $6 billion in child tax credits in 2013 to people who weren’t eligible to receive them, a government investigator said Tuesday.

Payments went to families that mistakenly claimed the tax credit or claimed the wrong amount, as well as taxpayers who committed fraud, according to an audit by J. Russell George, the Treasury inspector general for tax administration.

The audit highlights problems with a tax credit that President Barack Obama has championed as a way to help low-income working families.

Obama’s 2009 economic- stimulus package temporarily expanded the credit to more families that don’t make enough money to pay federal income tax. These families receive the $1,000-per-child credit in the form of a tax refund. The report released Tuesday focused on payments to these families.

The expanded tax credit expires at the end of 2017. Some Democrats in Congress tried to make it permanent as part of a package of tax breaks lawmakers are rushing to pass before leaving town for the year. But those talks collapsed.